Utility Reform

Energy Probe was first to recognize that an electric utility business is a hybrid: The transmission and distribution lines that form the power grid is a natural monopoly while the electricity generating plants that feed power into the grid is naturally competitive. Energy Probe’s 1982 model for electricity reform called for traditional power utilities to be broken up into government-regulated grids and privately owned power generators that would compete with one another. This model was adopted in the UK in 1989, leading to results that Energy Probe predicted: the demise of nuclear and coal power in the UK and its adoption of high efficiency natural gas technologies. This model has since become the dominant model for electricity sector restructuring in the world.

Energy Probe’s recommendations in the late 1980s and early 1990s for deregulation reforms in Ontario’s natural gas sector contributed to an industry restructuring that yielded both economic and environmental benefits.